Investor's Guide to Foreclosures in Fannie Mae

Foreclosures in Fannie Mae have been fulfilling the dream of home ownership for a

good number of middle- and low- income individuals and families for sometime now. The company's main mission is to enable these families to buy affordable homes with easy terms. It does not offer fresh loans but rather buy up the closed loans of lenders to enable these lenders to offer new housing loans to the market.

These purchased loans are bundled together and invested in capital markets as security instruments that earn a return after a predetermined time. This security instrument also goes by the name mortgage-backed securities. This form of investing spreads the risk to a wider pool of bundled loans so that when one go bad, the effect is not felt heavily, plus Fannie Mae guarantees them. At the other end, lenders and banks sell foreclosures in Fannie Mae transferring the loan proceeds back to the company.

The main operations of Fannie Mae include single- and multi-family housing as well as community development projects. The types of homes offered include family homes, townhouses, duplexes, condos and apartments. When the housing industry is on a down trend, the number of foreclosures are at its highest.

Fannie Mae homes are sold as is so expect to do repairs. Be sure to bring along a certified home inspector when you visit the property so that you can get a clear assessment on the cost of repairs.

Finding Fannie Mae Foreclosures

Foreclosures in Fannie Mae are offered through real estate brokers and agents and can be found in the Multiple Listings Service. Banks and lending institutions offer them as well. Fannie Mae only deals with licensed real estate agents and brokers so buyers would have to enlist the services of one.

It also requires that the buyer is pre-approved for a home loan. When an offer is made for a Fannie Mae home the company can either accept or reject the offer and they may also make a counter-offer. Sometimes several offers are being considered for one property. So it is best to prepare an offer that is attractive enough to be accepted.

Investor's Guide to Foreclosures in Fannie Mae

By: Joseph B. Smith

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